maximum Limit for penalty for non filing of accounts

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Shamili G A (Querist)
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16 July 2009 Dear Sir,
The Sec 599 of the companies act does not specify any limit for the penalty amount to be paid in case of default in filing the accounts,
but in the ROC's fee calculator the penalty for default does not exceed 1 lakh.
So is 1 lakh the maximum penalty amount? if So, which Act prescribes it?
Please help.....

Ankur Garg

Ankur Garg (Expert)
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16 July 2009 ROC FEES
Late Filing Fees
Upto one month == 1 Time of normal filing fee
More Than One Month Upto three month == 2 Time of normal filing fee
More Than three Month Upto six month== 4 Time of normal filing fee
More Than six Month Upto one year== 6 Time of normal filing fee
More Than one year Upto two year== 8 Time of normal filing fee
More Than two year== 9 Time of normal filing fee

Maximum late fee would be Rs. 5000

Shamili G A

Shamili G A (Querist)
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16 July 2009 Sec 598 of companies Act "If any foreign company fails to comply with any of the foregoing provisions of this Part, the company, and every officer or agent of the company who is in default, shall be punishable with fine which may extend to1[ten thousand rupees], and in the case of a continuing offence, with an additional fine which may extend to 2[one thousand rupees] for every day during which the default continues."

in this Section there is no maximum limit mentioned.
Sorry i forgot to mention that it is a foreign company.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2024 For foreign companies operating in India, compliance with statutory requirements and penalties for defaults are governed by the **Companies Act, 2013**. Specifically, **Section 598** and **Section 599** deal with the penalties for defaults by foreign companies. Here's a detailed look at these sections:

### **Section 598 - Penalties for Foreign Companies**

- **Default in Compliance:** If a foreign company fails to comply with the provisions of the Companies Act regarding financial statements, reporting, or other requirements, the company and every officer or agent in default can be penalized.
- **Penalty Amount:**
- The fine may extend to **₹10,000**.
- For a continuing offence, there may be an additional fine extending to **₹1,000** for every day during which the default continues.

### **Section 599 - Penalties for Non-Filing of Accounts**

- **Default in Filing Accounts:** Section 599 deals with the penalty for failing to file financial statements.
- **Penalty Amount:**
- This section does not explicitly state a maximum limit for penalties, and the specific penalty amounts may be subject to changes based on government notifications or amendments.

### **Penalties and Fee Calculators**

The **penalty fees** mentioned in the **ROC fee calculator** are typically based on the powers delegated to the Registrar of Companies and the rules framed under the Companies Act. While **Section 598** specifies fines up to ₹10,000, with additional fines for continuing defaults, the ROC may have prescribed specific caps for practical enforcement and administrative ease.

### **Penalties Under Other Provisions**

- **Companies (Registration Offices and Fees) Rules, 2014:** This set of rules provides the basis for fees and penalties related to compliance, including the late filing of documents. If there are specific penalties mentioned, they are usually aligned with these rules and applicable circulars.

### **Summary**

- **Section 598:** Specifies fines up to ₹10,000 and additional fines of ₹1,000 per day for continuing defaults.
- **Section 599:** Does not specify a maximum penalty limit, and the ROC fee calculator may impose practical caps based on administrative rules and notifications.
- **Maximum Penalty Cap:** For practical purposes, the ROC fee calculator often caps the penalties at a certain amount (such as ₹1 lakh) to standardize and simplify enforcement.

For the most accurate and updated information regarding maximum penalty limits, always refer to the latest notifications from the Ministry of Corporate Affairs (MCA), consult legal professionals, or check with the ROC directly.

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